LEGO® Strategy and Value Creation The Lisbon EMBA 2019-2021 Group 6 Group 9 Christian Luwisch Ana Júlia Almeida Isabel Viana João Falcão Madalena Reis Luis Costa Nuno Sousa Nádia Jamal Pedro Teixeira Tiago Fonseca LEGO® – Strategy and Value Creation | The Lisbon MBA There are a lot of skills around resilience and problem solving and creativity that you learn through play. Niels Christiansen, CEO of LEGO® 1 LEGO® – Strategy and Value Creation | The Lisbon MBA CONTENTS 1 Executive Summary ....................................................................................................................... 6 2 Company Overview ....................................................................................................................... 7 3 Environmental Analysis .............................................................................................................. 10 3.1 Macro-environment .............................................................................................................. 10 3.1.1 Sociocultural Environment ................................................................................................ 10 3.1.2 Economics ........................................................................................................................... 11 3.1.3 Technological Environment ............................................................................................... 11 3.1.4 Ecological............................................................................................................................. 12 3.1.5 Political-Legal ..................................................................................................................... 12 3.2 Micro-environment ............................................................................................................. 15 3.2.1 Customers ............................................................................................................................ 15 3.2.2 Competition......................................................................................................................... 25 3.2.3 Suppliers .............................................................................................................................. 29 3.2.4 Industry ............................................................................................................................... 30 3.3 Key Success Factors .............................................................................................................. 33 4 Organization Analysis .................................................................................................................. 35 4.1 Resource and Capabilities .................................................................................................... 35 4.2 Core Competencies .............................................................................................................. 39 4.3 Strategic Fit .......................................................................................................................... 44 4.3.1 By Demographic Segmentation .......................................................................................... 44 4.3.2 By Product Type Segmentation .......................................................................................... 47 4.4 SWOT Analysis .................................................................................................................... 49 4.5 New SWOT Analysis ........................................................................................................... 52 4.6 EGOS Map ............................................................................................................................ 56 4.6.1 Ole Kirk Christiansen ......................................................................................................... 56 4.6.2 Niels Christiansen ............................................................................................................... 56 4.6.3 LEGO Company .................................................................................................................. 57 5 Business Model and Sustainability .............................................................................................. 59 5.1 Business Model ..................................................................................................................... 59 5.2 Sustainability ........................................................................................................................ 65 2 LEGO® – Strategy and Value Creation | The Lisbon MBA 5.2.1 Economic sustainability ...................................................................................................... 66 5.2.2 Environmental Sustainability ............................................................................................. 67 5.2.3 Social Sustainability ............................................................................................................ 69 5.2.4 Governance Sustainability .................................................................................................. 70 6 Objectives and Strategy ............................................................................................................... 73 6.1 Vision and Mission and Values ........................................................................................... 73 6.2 Objectives ............................................................................................................................. 76 6.3 Value Creation ..................................................................................................................... 79 6.3.1 Value Creation for Customers ............................................................................................ 79 6.3.2 Value Creation for Shareholders ........................................................................................ 85 6.3.3 Value creation for Employees ............................................................................................ 89 6.3.4 Value Creation for Community ......................................................................................... 90 7 Business Strategy: Products-markets .......................................................................................... 92 7.1 Products-Markets Matrix .................................................................................................... 93 7.2 Ansoff Matrix ....................................................................................................................... 96 7.2.1 Market penetration ............................................................................................................. 97 7.2.2 Product development .......................................................................................................... 98 7.2.3 Market Development .......................................................................................................... 99 7.2.4 Range Diversification........................................................................................................ 100 7.3 Products-Markets Evolution ............................................................................................. 102 7.4 Generic Strategies .............................................................................................................. 103 7.5 Innovation Strategy ........................................................................................................... 104 8 Vertical Integration ................................................................................................................... 108 8.1 Value Creation ................................................................................................................... 110 8.2 Modes of Vertical Integration ........................................................................................... 111 8.3 Strategic Outsourcing ........................................................................................................ 112 9 Internationalization ................................................................................................................... 115 9.1 Foreign markets evaluation and country attractiveness .................................................. 116 9.2 Competitive advantage of the nations – national diamond ............................................. 118 9.3 Sector clusters .................................................................................................................... 120 9.4 Internationalization modes ............................................................................................... 122 9.5 Country and firm advantage.............................................................................................. 122 9.6 Internationalization stages ................................................................................................ 123 3 LEGO® – Strategy and Value Creation | The Lisbon MBA 9.7 International integration and responsiveness .................................................................. 126 10 Diversification ........................................................................................................................ 127 10.1 Diversification matrix ........................................................................................................ 128 10.2 Business Portfolio Planning..............................................................................................